It seems like just about every state lately is getting into the biofuels race wanting to become a leader.

The latest is Tennessee, where Governor Phil Bredensen announced that his “proposed 2007-2008 budget will include $61 million for a comprehensive alternative fuels strategy to position Tennessee to be a national leader in the production of biomass ethanol and related research.”

Bredesen’s proposed budget includes $40 million to build a pilot biomass ethanol plant that will operate at a capacity of five million gallons per year.

“We know we can make ethanol from grassy and woody materials,” Bredesen said. “The challenge is producing it in large volumes and at a price that is competitive with gasoline, and in proving we can be the ones to take the discovery from the laboratory to the marketplace.”